Canadian households are seeing their net worth soar — at least on paper. Statistics Canada (Stat Can) data shows household net worth made a big leap in Q3 2021, mostly due to real estate. An average household is seeing wealth accumulate at one of the fastest rates in history, with Millennials leading the surge. There’s just one catch — Millennials are seeing a big surge due to real estate. Those without any are falling behind.
Canadian Households Have Seen Their Net Worth Rise 3x Faster Than Normal
Canadian households have seen their net-worth soar over the past few years. Households had their average net-worth hit $981,900 in Q3 2021, up 16.9% ($142,300) from a year before. About 58.5% of the surge in net worth was due to real estate, with the asset equivalent in size to 40% of total net worth. To say this is speedy growth is an understatement. High single-digit growth is considered big, with a double digit growth rate pre-2020 being rare.
Canadian Average Household Net Worth By Demographic
The average net worth for Canadian households by demographic of birth year, expressed in dollars.
Source: Statistics Canada; Better Dwelling.
Annual growth slowed but remains at multiples higher than pre-2020. It peaked at 20.7% in Q1 2021 and has since fallen almost 4 points lower. Still, growth is over 3x higher than the average pre-2020, driven by real estate. For those who have it anyway.
Millennial Net Worth Rips Higher, But 80% Is Due To Real Estate
Millennials have the least wealth, and most of it is real estate. The average millennial household’s net worth reached $491,200 in Q3 2021, up 38.7% ($137,000) from a month before. The gains in real estate were equivalent to 75.6% of the net worth increase. Real estate represents a share equal to 82% of their net worth. This is a significant concentration, most likely due to high prices. A demographic early in its career can’t diversify easily with this level of price growth.
Canadian Average Household Net Worth Change By Demographic
The average change in net worth for Canadian households by demographic of birth year, for total net worth and real estate. Expressed in Canadian dollars.
Source: Statistics Canada; Better Dwelling.
Generation X Is The Most Real Estate Wealthy Cohort
Generation X households have seen the largest increase in their net worth when looking at dollar terms. The average household’s net worth reached $1.26 million in Q3 2021, up 29.7% ($288,900) from the year before. Real estate gains were equivalent to 54.4% of the annual increase in net worth. The value of real estate held reached about 57% of net worth. It’s also worth noting Gen X had the most real estate wealth of any of Stat Can’s generation cohorts.
Boomers Have Less Real Estate Wealth Than Gen X, But There’s Possibly A Catch
Boomers are the wealthiest cohort, having had the most years to accumulate it. The average Boomer household had a net worth of $1,336,088 in Q3 2021, up 10.5% ($126,888) from a year before. The gain in real estate was equivalent to 39.5% of the net worth increase and about 40% of total wealth. This demographic’s real estate value is lower, bringing up an interesting conflicting data point.
Boomers are also the largest demographic of new mortgage accounts. They also happen to have the highest rate of homeownership in the country. This may reveal an issue with the way home prices are estimated when included as an asset.
Not a lot of surprises in the net worth data, but it’s still a mind-blowing data drop. Growth is slowing but remains over 3x the annual rate seen pre-pandemic. More wealth is generally a good thing but is more complicated when it’s real estate-driven.
For instance, Millennials have seen their net worth concentrate in real estate. Those without a home, increasingly common at these prices, are falling behind. This is likely another very substantial demographic liability forming.
Please use age ranges – these generational labels are arbitrary and ill-defined, except for the Boomers!
I agree, can we drop the use of these labels? Using actual age ranges would be more transparent and accurate than generational labels. I’ve seen my own age get lumped between different labels numerous times.
Canada has official labels, which is where the label comes from. If you stop using random definitions kicking around on the internet and the government’s labels, there’s no inbetween.
How Statistics Canada defines generations is here.
https://www150.statcan.gc.ca/n1/pub/13-605-x/2020001/article/00006-eng.htm
They aren’t. It’s literally the term Statistics Canada uses. Like, an actual button that says “Millennials,” “Boomers,” etc.
It looks like they didn’t include pre-war, although it’s less than 1% of the population now.
How are we the wealthiest and also the most indebted at the same time? Don’t Canadians owe like $1.75 for every $1 of disposable income? Interesting that they use an average to pump the narrative that we’re all millionaires. Are the boomers with paid off housing and no debt skewing the average higher?
So if I don’t own real-estate and still rent I’m a worthless Xennial/late Millennial.. Nice.
Talk about rising income inequality — if you have no property, your net-work is likely to have shrunk.. If you do have, well, you’re a millionaire.. What a “just” society, Justin.. The irony that his father (who had 10X the IQ he has) spoke those words…..
Pretty insane how the BoC is willing to marginalize such a large share of Canada’s population like this. I find it shocking.
I would like to understand how mortgage and household debt are not somehow included in the “average net worth”.
If I were to buy an expensive painting, and burrowed $1 million to purchase it, I do own the painting, but I would assume I am also indebted by the same amount the painting is worth — as long as I did not overpay for the art.
How can we say we have (massively) growing net worth and also massive growing household debt and mortgages?
Yes, your net worth is your asset minus liabilities. If you bought a house last year for $1 million with 20% down, and it increased by 30%, your net-worth is $200,000 you put down, $300,000 in accrued equity, and the amount of principal you paid down.
In other words, anyone who bought a house last year in a major city is at least $500,000 at these levels, more in some regions.
No they’d still be negative networth.
It’s inflated growth, Once the markets come back down to reality most of the gains will be given back, any house you bought in the last 2 years will depreciate by 20-30% when a privatized centralized bank hikes the rates on the money your overlords took to buy your votes during the pandemic. Enjoy it now cause the next 40 years are gonna suck.
Can you provide the definition of Household for these stat?
You really don’t want to be in a state where you don’t own a house these days. If you don’t own a house, only your expenses, such as rent, utilities, food and gas bills, go up, not your assets. Unless, of course, if you own hundreds of thousands in stocks, but most people don’t and most people can’t hold that much for years.
And what’s the percentile? 60th, 65th, 70th, 75th? I assume 75th because of wealth skew.